(Releads with World Bank, adds Fitch)

By Helen Nyambura-Mwaura and George Obulutsa

NAIROBI, Jan 3 (Reuters) - Post-election violence in Kenya could threaten its impressive economic gains and harm regional economies that depend on its status as an East African business hub, the World Bank said on Thursday.

The international lender said the aid agencies of leading western governments including the United States and Britain, plus the European Commission, shared its worries about the region's economies.

"They are concerned that the unrest that continues in some parts of the country threatens impressive recent gains in economic growth and poverty reduction," it said in a statement.

Earlier Kenya's currency market and stock exchange halted trade as police fought protestors trying to stage an anti-government rally in the capital over President Mwai Kibaki's disputed election win.

Kibaki, who was narrowly re-elected, is credited for overseeing an economic resurgence in Kenya where GDP growth is estimated at between 6.9-7 percent in 2007.

The World Bank said Kenya was the transit point for one quarter of the GDP of Uganda and Rwanda and one third of the GDP of Burundi. Those countries have already reported fuel shortages as supply lines in Kenya have been disrupted.

"The regional impact of the situation in Kenya could be significant," the World Bank statement added.

Credit ratings agency Fitch said urgent political dialogue was needed to restore stability in Kenya, and warned of a negative rating action if violence did not ease.

TURMOIL

Thursday's turmoil caused financial markets in Nairobi to close early, while the weekly tea and coffee auctions were postponed.

"We closed by 12 (noon) because the police advised us to leave town," Philip Wambua, treasurer at the Bank of Africa, told Reuters. The currency market normally closes at 1300 GMT.

Offshore trading in the shilling had fluctuated sharply on Thursday after the Kenyan currency lost 5 percent against the dollar in the last session.

The violence also forced the stock exchange to end trade only an hour after it had opened, as shots could be heard around the central business district, which borders a park where the banned opposition rally was meant to take place.

In thin and volatile trade, the shilling fell back 0.5 percent against the dollar to 67.66, after an initial 1.3 percent bounce from a four-month low, traders said.

"It's really volatile. Maybe it got a bit overdone but volumes are very thin," said one dealer in London. Another player in London noted a 7 percent gap between bid and offer prices on dealing screens, indicating light trade.

"The market is still trading in quarters ($250,000 lots) ... because of a lack of liquidity. They are only prepared to make firm prices for quarters," said a Johannesburg-based trader. "The market is still on a needs basis."

Market players fear more disruption if another opposition rally announced for next Tuesday goes ahead.

Analysts were gloomy on the outlook for the shilling. Richard Segal, Africa fixed income strategist at Renaissance Capital in London, said yesterday's fall had been overdone.

But he added: "In the more medium term, the outlook is not promising. January is a huge month for tourism. Aid flows will fall, FDI (foreign direct investment) flows will fall."

However, some analysts say east Africa's biggest economy could bounce back if the unrest ended quickly and had limited impact on tourism.

Citigroup analyst David Cowen said that a sell-off in the shilling over the crisis could offer a good buying opportunity.

"Most economic fundamentals underpinning the economy's strong performance in the last two years are unchanged despite the political uncertainty," he said in a report. (Additional reporting by Bryson Hull in Nairobi, Sujata Rao and Carolyn Cohn in London and Gordon Bell in Johannesburg) (Writing by Katie Nguyen; editing by David Stamp)

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